I'm amazed at how few people are fond of "The Village". All of Shyamalan's works are on the top of my list, but it seems most of his fans were disappointed with Village. Night does incredible work with colors in this film along with incredibly ironic use of symbols in characters. Allow me to elaborate
For those who are unfamiliar with the color use that took place after the First World War, the 'Lost Generation' colors were commonly used in films and many books for the next few decades, and make a return in "The Village". Yellow, in a 'Lost Generation' scheme of things, represents Innocence and foolish nobility. Blue represents corruption, but a sort of natural corruption...one that we all possess. Green (combination of blue and yellow, very artistic) represents the acceptance of corruption, and the adaptation to it. A character that accepts corruption and plays off of others innocence might be identified with a green article of clothing. Red is used to symbolize a wound of some sort. Physical, emotional, spiritual....they all apply to red wounds.
Now that we have an understanding of the meaning behind 'Lost Generation' colors, lets apply them to Night's film and you'll see how he blatantly re-applies them.
The youth of the village, the ones unaware of the lies created to keep them in the village, wear yellow...the color of innocence. The reference to red as 'the bad color' is not as symbolic as the fact that the 'creatures' wear red themselves. The elders wound is an emotional wound brought on by their guilt for having created a false world for so many innocent people who suffer as a result of their innocence. When Lucius is fatally wounded, the medicines he requires are only kept in the modern towns. The elders must face the guilt of knowing that Lucius could be saved by the medicine. So when you see the elders parading around the village in their red monster costumes, you can see how their guilt would be strongest at this point, so strong that it wounds them emotionally and perhaps spiritually.
Enough of the colors, lets move on to symbols! Ivy Walker, the blind girl who falls in love with Lucius, is sent on a mission to obtain medicine. The symbolism of a blind girl being the only one capable of saving Lucius is ironic and very beautiful. Her father even states plainly "she is more capable than most in this village". It is because of her absolute innocence that she is able to venture forth into 'corruption' and return without being corrupted. She remains yellow as opposed to turning green, the color of the young mans uniform with who she speaks, and the color of his vehicle (had to throw back to the colors).
Maybe I'm just too fond of Night's color and symbol usage in this film, but I hope this helps some who maybe didn't understand the village before appreciate the film in deeper sense.